VA Home Loan Limits and Qualifying
Videos feature Tim Lewis, VA Loan Team Manager, NMLS #157603.
Can I borrow more than the value of my home with a VA home loan?
Some borrowers wonder if it's possible to take out a VA mortgage for more than the value of the home.
A VA home loan can finance up to 100% of a new purchase. The VA will not guarantee borrowed funds that exceed the purchase price. A borrower looking to make immediate improvements on a property after purchasing can look in to obtaining a second mortgage or HELOC if the home appraises for more than the amount for which it was purchased.
VA guidelines allow a borrower to refinance for up to 100% of the home's value, as determined by an appraisal of the home's current value. This means that a borrower can take cash out, up to the value of the home.
On a VA streamline refinance, otherwise known as an IRRRL, a borrower can refinance the entire current mortgage into a new mortgage with a lower rate and/or lower payments. An appraisal hasn't typically been required for this type of refinance, so borrowers have been able to take advantage of lower rates even if they owed more than the home was worth. However, in a declining housing market, lenders may require an appraisal on this type of loan to ensure the home's worth is in line with what's being borrowed.
If you would like to look further into a VA purchase loan or a VA refinance, you can receive answers directly from a VA loan professional.
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